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Myeloid-derived suppressor cells (MDSCs) have been investigated largely in the context of tumor progression. In contrast to the negative connotation of MDSCs in cancer immunity, our laboratory has recently reported on the development and role of pulmonary MDSC-like cells (CD11b(+)Gr1(int)F4/80(+)) in the regulation of allergic airway inflammation. These regulatory cells were expanded in a TLR4/MyD88-dependent manner and were both phenotypically and morphologically similar to those described in the tumor microenvironment. Although bacterial lipopolysaccharide (LPS) was initially described as an adjuvant in the development of allergic inflammation, subsequent studies showed that this is true only at relatively low doses of LPS. A high dose of LPS was shown to actually suppress eosinophilic airway inflammation. In our efforts to understand the mechanism underlying LPS-mediated suppression of allergic airway disease, we recently showed that LPS induces MDSC-like cells in the lung tissue in a dose-dependent manner, with increased accumulation of the cells at high doses of LPS. In contrast to lung dendritic cells (DCs), the MDSC-like cells did not traffic to the lung-draining lymph nodes, allowing them to act in a dominant fashion over DCs in the regulation of Th2 responses. The MDSC-like cells were found to blunt the ability of the lung DCs to upregulate GATA-3 or to promote STAT5 activation in primed Th2 cells, both transcription factors having critical roles in Th2 effector function. Thus, a complete understanding of the generation and regulation of the lung MDSCs would provide novel options for therapeutic interventions.